Same problem
Hi.
It sounds exactly like the problem I had.
Look at the thread :"Setup.inx problems" in this forum.
I did as suggested in there, and finally it installed.
The point is : copy the files from the CD's rootfolder to your Harddisk and run the installation from there.
Only one minor problem : At some point you are asked to insert the disk where the program can find "avi\binkplay.exe". Just select your CD-rom drive - e.g. "D:\" and not the full path.